30-Jun-2010 10:37 AM

Fitch affirms Delta Air Lines at B-; outlook revised to stable

Fitch Ratings revised (29-Jun-2010) the rating outlook for Delta Air Lines from "negative" to "stable" and affirmed debt ratings as follows: 

  • Issuer Default Rating (IDR) at B-;
  • First lien senior secured bank credit facilities (Delta Exit Facility) at BB-/RR1;
  • Second lien secured term loan (Delta Exit Facility) at B-/RR4.

Fitch also assigned ratings to Delta's other secured bank facilities and notes as follows:

  • Senior secured bank credit facilities due 2013, BB-/RR1;
  • First lien secured notes due 2014, BB-/RR1;
  • Second lien secured notes due 2015, B-/RR4. [more]

Fitch Ratings: "The revision of DAL's Rating Outlook follows a turnaround in free cash flow (FCF) generation witnessed since the beginning of 2010 and the clear upturn in industry revenue performance that should support a meaningful reduction in DAL's debt balances through the remainder of the year. Following a period of extreme operating stress during 2008 and 2009, balance sheet repair will require sustained improvements in cash flow generation and significant leverage reduction over the next several quarters. Management's focus on the importance of positive FCF generation and de-levering the balance sheet suggests that improvements in DAL's credit profile are now more likely in a period of premium air travel demand recovery supported by modest though still uneven economic growth," Company Statement, 29-Jun-2010.

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